ASX 200 consolidates as overseas markets make small gains, futures up 11 points

With Commonwealth Bank's (CBA) capital raising behind us, the Australian stock market should trade with a little less restraint from this point onward. Please don't forget that CBA is ex dividend today, thus it will pay a fully-franked A$2.22 today, which is the equivalent of $3.6 billion being shed from the ASX 200 today - so keep this in mind when assessing market performance, as the payment of this dividend is the equivalent of about 13 points of the ASX 200. CBA's closing price of $81.27 yesterday was more than satisfactory given the falls in the index since the stock last traded and the confirmation of the $5 billion dilution from the capital raised - so I think that's a great sign of investors.

In other positive news, Asciano (AIO) recommended the scheme of implementation with Brookfield Infrastructure, with an implied value of A$9.15 per share being made up of $6.94 in cash and 0.0387 Brookfield Infrastructure (market equivalent of $2.21) shares per AIO share. A 90c fully-franked dividend will be deducted from the $6.94 cash component should the scheme be approved, offering Australian shareholders the benefit of franking.

In today's last chart I've illustrated the slide of WTI crude oil, but I'll point out--once again--that it is at a level that it doing its job in putting peripheral producers out of business and shoring up more price control for the OPEC cartel in the future. This shouldn't sound conspiratorial, it's a political and economic reality - traditional energy producers are battling to remain relevant and this is how it can be done when a cartel is able to control core supply. The point I'm making here is that it doesn't need to go any lower to gain the effect that these established producers are looking for in order to curb peripheral supply coming from the US where increasing supply is more fragmented and costly to produce. I'll also make the point that, with US presidential primary campaigning under way, it is not in the current White House administration's interest to try and combat falling oil prices. The Democrats aren't overly concerned with the needs of oil producers in the US, because there's such little chance that they'll ever get their votes. In addition to that, the saving in fuel (a high component of US household energy consumption) is a boost for the American consumer and manufacturer - so I'm not expecting this trend to continue to fall much further, but I'm not expecting a convincing bounce either.

A note to all those interested in the Future Generation Global Investment Company (FGG) offer: Rivkin's offer ends this Friday, so get in touch now if you wish to apply. Instructions at the bottom of this article. If you're not familiar with the offer, get to know it by clicking here.


Source: Rivkin, Saxo Bank

To view the Rivkin economic calendar and Global Markets matrix, members can click here.

How to apply for the FGG IPO

As was the case with Future Generation Investment Company (FGX), Rivkin will be working with its broking partner CMC Markets in donating the broker stamping fees to charities associated with the investment company’s cause – in this case, youth mental health and homelessness.

With this in mind, we strongly urge you to follow the following steps accurately so Rivkin can add to the philanthropic nature of this IPO.

  1. Visit http://www.futuregeninvest.com.au/Global/prospectus.pdf to download and read the prospectus
  2. IMPORTANT: complete the Broker Firm Application Form on page 87 of the prospectus, this way we can donate the stamping fees
  3. Ensure you have sufficient funds in your Rivkin Securities stockbroking account to pay for the stock
  4. Enter the Broker Code 02662
  5. Enter the Adviser Code 0001
  6. Email your application to customerservice@rivkin.com.au or post it to:

Rivkin Securities FGG Offer
Po Box 1524
Double Bay 1360

Don’t have a Rivkin Securities stockbroking account? Open one now by emailing customerservice@rivkin.com.au (your Relationship Manager will call you back and pre-fill forms etc.) or phoning 1300 748 546. Our online brokerage is $11.00 or 0.11%, $9.90 or 0.11% for SMSFs that use Rivkin Super. PLUS we go the extra mile and donate non-core earnings like broking fees from this IPO to charity. You’re doing yourselves a favour and doing those in need a favour by getting involved.

This article was written by Scott Schuberg, CEO of Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3600.

Complex product warning

This article contains information about foreign exchange contracts, which are considered complex financial products. Please click here to read ASIC's foreign exchange trading article before considering an investment in foreign exchange contracts. 

This article contains information about CFDs, which are considered complex financial products. Please click here to read ASIC's "Thinking of trading contracts for difference?" document before considering an investment in CFDs.
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